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hello everybody how you doing I'm attorney Aiden Kramer with the law office of Aiden Kramer in Colorado and this is all up in your business in this episode of all up in your business I'm going to talk about non-compete agreements a non-compete agreement is a restrictive covenant that restricts one party from doing business or working with another business that is similar to the business of the other parties to that contract so for example if I was going to hire an employee I might have a non-compete agreement in my employment agreement that says that that employee after he or she is done working for me they can't go work for another attorney or they can't go open up their law practice that's a typical type of non-compete agreement the purpose of a non-compete agreement in general is to protect trade secrets and confidential information but when it comes to non-competes there are a lot of different variables and many states Colorado included kind of frown upon non-compete agreements and they won't enforce them except for under very specific situations because courts in general don't want to restrict somebody from working or from starting a business they don't want to have those restrictions to hinder individuals from doing what they want and having that freedom to work and to be employed and to start a business and all that so in most situations there are a few things in particular that are going to be evaluated to determine if a non-compete agreement should be enforced or if it's invalid the first factor is that there has to be reasonableness in the restriction in the timing and the scope of it so typically a non-compete will have a time frame for example that for two years this person can't compete with you and it will also have some kind of a geographical scope so either can't compete with me in the Denver area or in Colorado sometimes it's broader than that sometimes it's a two mile radius from your location whatever it is that timing and that geographical scope has to be reasonable that reasonableness is going to depend on your jurisdiction so it's going to depend on your state's laws and court history and it's also going to depend on the situation itself so if it's just an employer-employee relationship that scope is most likely going to have to be much smaller a much smaller geographical area much smaller timing whereas if you're selling a business that scope might be a little bit bigger if you're selling a business or actually if you're buying a business a lot of times in that purchase agreement there will be a non-compete so that the seller doesn't just go off and start a competing business to the one that they just sold to you so in that type of situation sometimes the scope can be broader but whatever it is that timing and the geographical limitations those need to be reasonable whatever that means in your situation or your jurisdiction there also has to be a legitimate business interest that you're trying to protect so the example that I used of having one of my employees sign a non-compete that probably wouldn't hold because as a lawyer all of my client information is confidential already I don't really have a whole lot of trade secrets or other confidential info aside from my clients information and an employee who's working for me I would require them to agree to keep that stuff confidential but I don't really care if they go work for a competitor they would be violating that confidentiality if they disclosed one of my clients to another attorney and in that instance I don't really have a legitimate business interest in having a non-compete because there are really a whole lot of confidential things or trade secrets that I'm trying to protect that I can't otherwise protect with just a general confidentiality agreement but on the other hand in that situation of buying and selling a business with the buyer there is a legitimate business interest to a non-compete because if they buy a business and then the seller starts at p-ting business that's going to drastically potentially damage their business and so they really do have a business interest in that non-compete agreement so if you've received a contract from somebody that has a non-compete agreement or if you want somebody else to sign a non-compete agreement you want to make sure that the agreement is going to be reasonable and that it is actually going to be valid and enforceable otherwise it's not going to do any good and if you're the one being asked to sign a non-compete just know that you don't have to sign a non-compete you don't have to find anything really but just because someone hands you a non-compete doesn't mean that it's non-negotiable if it says five years you can try to negotiate that down to maybe one or two years or the geographical limitations all of that can be negotiated and in many cases should be negotiated if you're in a situation where an employer or a business partner somebody wants you to sign a non-compete make sure you read it and you really understand it because that's going to really impact your future prospects for business or employers and if it's something that you're concerned about then definitely have an attorney help you with it because they'll be able to tell you if there's something that you should negotiate or if you should even sign this in the first place and on the same end if you want somebody else to sign a non-compete definitely have an attorney assist you with it because if you have someone sign a non-compete and it's invalid it's not going to do you any good so having an attorney drafted to make sure that it will be enforceable is going to be important if you're in Colorado and need some assistance with a non-compete agreement or anything else having to do with your business please feel free to contact me my phone number and email are below be sure to subscribe to my channel so you don't miss any more exciting episodes of olive in your business thank you all so very much for watching I'm Aiden Kramer and I'll see you next time